Société Générale is one of the most important banks in Europe and the second most important in France. Its headquarters are in Paris, in the Défense financial district, and its three main activities are retail banking & specialized financial services, corporate banking and global and investment management & services.

SocGen is the oldest French bank, having been formed by a group of industrialists and financiers in 1864 to support the development of French trade and industry. More recently, the group has focused on the three core businesses mentioned above and which now represent the bank’s three main divisions. SocGen is currently the no. 3 corporate bank in the Euro zone in terms of net banking income and the no. 6 in France by capitalization value. It bounced back into the news at the end of January following a record 50 billion scam by a 31 year old employee, Jerome Kerviel, who eluded all the internal controls to bet on European share indexes, clocking up multi-billion euro positions. SocGen managed to promptly close the positions opened by Kerviel and limit the damage to five billion euro.

However, the Guinness sized fraud wasn’t the only bad news the bank had to deal with. It also had to announce 2,05 billion in writedowns relating to the US subprime crisis. At the start of the month, the bank launched a capital increase to strengthen its equity situation. The subscription period will last from 21st February to 29th February. The €5.5 billion operation (involving 116 million new shares) is guaranteed by JP Morgan Chase, Morgan Stanley and Société Générale Corporate and Investment Banking, acting as joint global co-ordinators and joint-bookrunners, with Crédit Suisse and Merrill Lynch as co-bookrunners. Meanwhile, rumours persist concerning interest in the French bank by certain big European banks.

After the German Commerzbank denied interest, there was speculation as to an alliance with the banking division of the French Post Office, Banque Postale, based on a project prior to the scandal at the end of January.